EXHIBIT 10.7
CHANGE IN CONTROL AGREEMENT
THIS AGREEMENT, dated September 16, 1994, by and between:
AQUAPENN SPRING WATER COMPANY, a Pennsylvania Business Corporation (the
"Company"),
-AND-
XXXXXXXX X. XXXXXXXXXX (the "Employee").
Recitals
A. Employee is an executive of the Company with significant
policy-making and operational responsibilities in the conduct of its
business.
B. The Company recognizes that Employee is a valuable resource
for the Company and the Company desires to be assured of the continued
service of Employee.
C. The Company is concerned that upon a possible or threatened
change in control, Employee may have concerns about the continuation of his
employment and/or his status and responsibilities and may be approached by
others with employment opportunities, and desires to provide Employee some
assurance as to the continuation of his employment status and
responsibilities on a basis consistent with that which he has earned in the
event of such possible or threatened change in control.
D. The Company desires to assure that if a possible change of
control situation should arise and Employee should be involved in
deliberations or negotiations in connection therewith that Employee will be
in a secure position to consider and/or negotiate such transaction as
objectively as possible and without implied threat to his financial
well-being.
E. The Company is concerned about the possible effect on Employee
of the uncertainties created by any proposed change in control of the
Company.
F. Employee is willing to continue to serve the Company but
desires that in the event of such a change in control he will continue to
have the responsibility, status, income, benefits and perquisites that he
received immediately prior to that event.
NOW THEREFORE, the parties hereto, intending to be legally bound,
agree as follows:
1. Change in Control. The provisions of Section 2 and 3 of this
Agreement shall become operative upon a "change in control" of the Company,
as hereinafter defined. For purposes of this Agreement, a "change in
control" shall be deemed to have occurred if and when:
(a) Any person or group of persons acting in concert shall,
subsequent to the date of this Agreement, have acquired ownership of
or the right to
vote or to direct the voting of shares of capital stock of the Company
representing thirty (30%) percent or more of the total voting power of
the Company, or
(b) The Company shall have merged into or consolidated with
another corporation, or merged another corporation into the Company,
on a basis whereby less than fifty (50%) percent of the total voting
power of the surviving corporation is represented by shares held by
former shareholders of the Company prior to such merger or
consolidation, or
(c) The Company shall have sold more than fifty (50%)
percent of its assets to another corporation or other entity or
person, or
(d) As the result of, or in connection with, any cash tender
or exchange offer, merger or other business combination, sale of
assets or contested election, the persons who were Directors of the
Company before such transaction cease to constitute a majority of
Directors of the Company.
2. Termination Within One (1) Year. In the event that the
employment of Employee with the Company is terminated involuntarily within
one (1) year after a change in control occurs:
(a) Employee shall be entitled to receive an amount of cash
equal to the sum of the following amounts:
(i) one (1) times his annual salary at his rate on the date
of termination of employment; and
(ii) one (1) times the Company's annual retirement plan
contribution at the Employee's contribution rate on the
termination of his employment (subject to applicable limitations
of the Internal Revenue Code, which may dictate that such amount
shall not be added to the retirement plan but shall be paid in
cash).
The sum of these amounts shall be paid in equal monthly
installments over a period of twelve (12) months, the first such
installment to be paid within ten (10) days after Employee's
termination of employment.
(b) Employee shall continue for a period of twelve (12)
months from the date of his termination to be covered at the expense
of the Company by the same or equivalent hospital, medical, accident,
and disability insurance coverages as he was enrolled in immediately
prior to termination of his employment; provided, however, that the
Employee may elect to be paid in cash within thirty (30) days after
termination of his employment, an amount equal to the Company's cost
of providing such coverages during such period.
(c) All outstanding stock options held by Employee, both
exercisable and nonexercisable, shall be immediately exercisable
regardless of the time such option has been held by Employee and shall
remain exercisable until the original expiration date of such option,
subject to applicable requirements of the Internal Revenue Code.
3. Resignation Within One Year. In the event the Employee should
determine in good faith that his status or responsibilities with the
Company has or have diminished subsequent to a change in control, and shall
for that reason resign from his employment with the Company within one year
after such change in control, Employee shall be entitled to receive all
payments and enjoy all of the benefits specified in Section 2 hereof.
4. Other Events. If Employee resigns from the Company within one
(1) year of a change of control, Employee shall be entitled to receive all
payments and enjoy all of the benefits specified in Section 2 hereof should
one or more of the following events occur within two (2) years following a
change in control:
(a) If Employee determines that there has been a significant
change in his responsibilities or duties with the Company and, for
that reason, Employee resigns from the Company; or
(b) If the base salary paid by the Company to Employee is
reduced by more than fifteen (15%) percent from his salary immediately
prior to the change in control.
5. Agreements Not Exclusive. The specific agreements referred to
herein are not intended to exclude Employee's participation in other
benefits available to executive personnel generally or to preclude other
compensation benefits as may be authorized by the Board of Directors of the
Company at any time, and shall be in addition to the provisions of any
other employment or similar agreements.
6. Enforcement Costs. The Company is aware that upon the
occurrence of a change in control, the Board of Directors or a shareholder
of the Company may then cause or attempt to cause the Company to refuse to
comply with its obligations under this Agreement, or may cause or attempt
to cause the Company to institute, or may institute, litigation seeking to
have this Agreement declared unenforceable, or may take, or attempt to
take, other action to deny Employee the benefits intended under this
Agreement. In these circumstances, the purpose of this Agreement could be
frustrated. It is the intent of the company that Employee not be required
to incur the expenses associated with the enforcement of his rights under
this agreement by litigation or other legal action because the cost and
expense thereof would substantially detract from the benefits extended to
Employee hereunder, nor be bound to negotiate any settlement of his rights
hereunder under threat of incurring such expenses. Accordingly, if
following a change in control, it should appear to Employee that the
Company has failed to comply with any of its obligations under this
Agreement or in the event that the Company or any other person takes any
action to declare this Agreement void or unenforceable, or institutes any
litigation or other legal action designed to deny, diminish or to recover
from Employee the benefits intended to be provided to Employee hereunder
and that Employee has complied with all of his obligations under this
Agreement, the Company irrevocably authorizes Employee from time to time to
retain counsel of his choice at the expense of the Company as provided in
this Section 5, to represent Employee in connection with the initiation or
defense of any litigation or other legal action, whether by or against the
Company or any director, officer, shareholder or
other person affiliated with the Company, in any jurisdiction.
Notwithstanding any existing or prior attorney-client relationship between
the Company and such counsel, the Company irrevocably consents to Employee
entering into an attorney-client relationship with such counsel, and in
that connection the Company and Employee agree that a confidential
relationship shall exist between Employee and such counsel. The reasonable
fees and expenses of counsel selected from time to time by Employee as
hereinabove provided shall be paid or reimbursed to Employee by the Company
on a regular, periodic basis upon presentation by Employee of a statement
or statements prepared by such counsel in accordance with its customary
practices.
7. No Set-Off. The Company shall not be entitled to set-off
against the amount payable to Employee any amounts earned by Employee in
other employment after termination of his employment with the Company, or
any amounts which might have been earned by Employee in other employment
had he sought other employment. The amounts payable to Employee under this
Agreement shall not be treated as damages but as severance compensation to
which Employee is entitled by reason of termination of his employment in
the circumstances contemplated by this Agreement. However, a set-off may be
taken by the Company against the amounts payable to Employee for expenses
covering the same or equivalent hospital, medical, accident, and disability
insurance coverages as set forth in Section 2(c) of this Agreement if such
benefit is paid for the Employee by the employer employing such Employee
after termination by the Company or after Employee's resignation as under
the circumstances set forth in Section 3 of this Agreement.
8. Termination. This Agreement has no specific term, but shall
terminate if, prior to a change in control of the Company, the employment
of Employee with the Company shall terminate.
9. Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the Company and its successors and assigns, and
shall be binding upon and inure to the benefit of Employee and his legal
representatives, heirs, and assigns.
10. Severability. In the event that any Section, paragraph,
clause or other provision of this Agreement shall be determined to be
invalid or unenforceable in any jurisdiction for any reason, such Section,
paragraph, clause or other provision shall be enforceable in any other
jurisdiction in which it is valid and enforceable and, in any event, the
remaining Sections, paragraphs, clauses and other provisions of this
Agreement shall be unaffected and shall remain in full force and effect to
the fullest extent permitted by law.
11. Governing Law. This Agreement shall be interpreted, construed
and governed by the laws of the Commonwealth of Pennsylvania.
12. Headings. The headings used in this Agreement are for ease of
reference only and are not intended to affect the meaning or interpretation
of any of the terms hereof.
13. Gender and Number. Whenever the context shall require, all
words in this Agreement in the male gender shall be deemed to include the
female or neuter gender, all singular words shall include the plural, and
all plural words shall include the singular.
IN WITNESS WHEREOF, this Agreement has been executed the date and
year first above written.
ATTEST: AQUAPENN SPRING WATER COMPANY
/s/ X.X. Xxxxxx By: /s/ Xxxxxx X. Xxxxx
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Secretary Xxxxxx X. Xxxxx
President
(Illegible Signature) /s/ Xxxxxxxx X. Xxxxxxxxxx
------------------------ --------------------------
Xxxxxxxx X. Xxxxxxxxxx
